Oregon Attorney General Dan Rayfield scored a legal win Oct. 22 that preserves student loan forgiveness for public-sector workers across Salem and the state.

The Trump administration dropped its appeal in a federal case Rayfield helped bring, locking in a June 2026 court ruling that struck down a U.S. Department of Education rule. That rule would have let the agency strip Public Service Loan Forgiveness (PSLF) eligibility from employees at government agencies and nonprofits it deemed to have a "substantial illegal purpose," according to the Oregon Department of Justice.

PSLF forgives remaining federal student loan balances for public servants who make 10 years of qualifying payments. Teachers, nurses, firefighters and social workers all qualify. The program is a key recruiting tool for public employers in Salem, where state agencies and the Salem-Keizer School District employ thousands of workers.

"Teachers, nurses, firefighters, social workers, and nonprofit staff made a deal when they chose public service: do work that serves the community, make your payments, and after 10 years, your loans will be forgiven," Rayfield said in a statement. "This federal administration tried to change that deal based on politics, by deciding which kinds of public service work it didn't like."

Rayfield and 21 other attorneys general sued the Department of Education in November 2025, arguing the rule was designed to punish states and organizations the administration opposed. The coalition said the regulation targeted agencies that provide legal services to immigrants, offer gender-affirming care to minors, run diversity, equity and inclusion programs, or engage in civil protest.

The U.S. District Court for the District of Massachusetts ruled against the administration in June 2026. The court found the rule was contrary to law, arbitrary and capricious, beyond the department's authority and a violation of the First Amendment. Forbes reported at the time that a separate federal court in Washington, D.C., reached the same conclusion in a parallel case that same day.

The administration had been expected to appeal. Instead, a joint stipulation filed Oct. 22 in the U.S. Court of Appeals for the First Circuit shows both sides agreed to dismiss the case, with each side bearing its own costs.

Congress created PSLF in 2007 with bipartisan support. Between June 2024 and July 2025, nearly 3 million Americans applied for the program, according to Department of Education records cited by the Oregon Capital Chronicle.

With the appeal dropped, the Massachusetts court's ruling stands and no restrictions on PSLF eligibility are in effect.